The Twelve Fails Of Christmas: Manchester's Big Property Flops Of 2019, Predicted
Not every Christmas gift is a joy, not every present is just what you wanted. And in that spirit of festive disappointment Bisnow offers you a unique take on the traditional seasonal predictions story.
Bisnow canvassed opinion from a range of figures in the property business, asking them what definitely will not happen in 2019.
He’s making a list, he’s checking it twice … and we can reveal it.
You may have been naughty, you may have been nice, either way grab a mince pie, get shouty-drunk on medium sherry, and have your sad trombone sound effect ready.
This is Bisnow’s exclusive rundown of the property fails and potential real estate problems coming your way in 2019.
1. The Greater Manchester Spatial Strategy Will Not Be Finalised
“GMSF will not reach an agreed state. Still too much uncertainty about how much land should be released from the Green Belt and where,” Barton Willmore partner Dan Mitchell said.
It has been a stop-start year for the ambitious Greater Manchester spatial strategy, originally intended to take 11,000 acres out of the Greater Manchester green belt, and to create up to 24M SF of new commercial floorspace. Salford City Mayor Paul Dennett was put in charge of the rethink.
There have been five (or more, or less, it depends how you count them) delays during 2018 and the rewritten plan is expected to be open for public consultation in Jasnuary 2019.
But progress thereafter may be slow because none of the basic problems have been solved, not the least of which is what mayor Andy Burnham wants and what council leaders want are not necessarily the same, and that what both of them want is not necessarily what the government wants.
In September there was an “absolute stand off” between Burnham and council leaders, the Manchester Evening News reported.
A hostile public or property reaction to the consultation draft in January could easily reignite the row.
2. High Street Retail Will Not Recover
“There will not be any recovery in the retail sector, both high street and shopping centre markets," APAM founder Simon Cooke said. "Retailers will continue to close shops as they scramble to adapt to consumer habit changes. More CVAs are inevitable and landlords will have to accept lower rents or invest in substantial capex to reposition or reconfigure shopping centres into ‘fit for purpose’ town-centre community hubs.”
Oh dear. Debenhams has problems, ASOS has issued a profit warning, Laura Ashley is closing 40 stores, Blue Inc. is in administration yet again. The trail of destruction down the U.K.’s high streets shows no signs of letting up. The 2017 Business Rates revaluation (the first for seven years) has added to the burden.
A popular mechanism for weathering the storm in 2018 was the Company Voluntary Arrangements process to try and restructure retail businesses, including rent reductions and store closures. While the process can help retailers, it does not provide a guarantee of recovery, CBRE research showed.
“Landlords and investors might resent CVAs as an ‘easy’ way to reduce rents for retailers. However, often CVAs provide a better alternative to retailers entering into liquidation or administration, which should ideally be avoided if the retailer is trading well,” CBRE Head of U.K. Retail Rhodri Davies said.
CBRE examined a sample of 1,419 stores within recent retailer restructurings, and found distinct regional patterns to store portfolio change, with stores in London and the South East typically performing better, despite higher business rates and wage bills on average. At the town level, stores in bigger cities are also more likely to be retained than closed, supporting the argument that prime city centre ‘experiential’ retail is preferred by customers.
3. Men Will Not Dominate The Property Boardroom
“2019 will see an equal number of men and women sitting at the boardroom tables and managing our property businesses,” Cushman & Wakefield Head of Manchester Caroline Baker said.
2018 was the year of #MeToo, as routine sexual harassment in the workplace was, belatedly, exposed and shamed. The unseemly activities of the Presidents’ Club, an event dominated by the property sector, played a pivotal role in exposing a culture of casual 'handsy' exploitation.
However, Bisnow’s analysis of women in property in the U.K., U.S. and Ireland showed there was still plenty of room for improvement. “A palpable sense of disrespect, fear and frustration persists as women continue to grapple with wage disparity, sexism, upward mobility and sexual harassment. Some women feel left out, left behind and, at times, voiceless,” Bisnow reported in March 2018.
“We are making progress and I hope that I, and others like me, can inspire female colleagues to step up and play an active part role in shaping the future of our industry,” Baker told Bisnow.
4. Bye Bye Theresa
“Theresa May will definitely not be Prime Minister by this time next year. Confidence in her ability to lead has been shattered by the Brexit negotiations. That will create more speculation and economic uncertainty,” Queensberry Chief Executive Paul Sargent said.
At the time of writing Mrs. May is still prime minister. Things may have changed by the time you read it.
5. The Jargon Will Not Stop
Are you working with any design researchers? Keen to have a meeting with a workplace experience consultant? 2019 could be your lucky year as the nonstop flow of office property jargon accelerates.
“By the end of 2019 most office fit-out contractors will have stopped using this description and will have rebranded themselves as ‘workplace experience experts’ to better connect with their target occupier audience,” Lambert Smith Hampton Office Director Andrew Gardiner said.
6. HS2 Will Not Be Going Anywhere
“HS2 won’t make any real progress in 2019, at least not for us here in the North," Office Insight Project Director George Dunbar said. "In February 2019, the full business case for Phase 1 is to be published. Crossrail has already reported a set-back for autumn 2019 and as reported in The Times, the timetable for parliamentary approval of the northern section of HS2 is now expected in 2020.”
The prediction comes as HS2 loses its chairman, and is under attack for overspending and a lack of direction.
“In the meantime, train fares will continue to rise sharply and squeeze commuter’s budgets. Those affected will mainly be city centre workers who already face issues with our train system. Manchester Oxford Road has been named the worst railway station for delays and cancellations in the U.K. And let’s not even mention the Northern Rail issues this year, best of luck in 2019 folks,” Dunbar said.
7. You Will Not Talk About Bitcoin
There was a brief moment in summer 2017 when it seemed like cryptocurrencies were the Next Big Thing. Today, with their values plunging and good old fashioned money and assets back in fashion, the world seems a little different.
“Something that we won't see in 2019 is cryptocurrency being widely used and lauded as the convenient way to do financial transactions," CBRE Manchester Managing Director John Ogden said. "Using digital currency is, for the most part, complicated and often time consuming as it uses various platforms and involves messing around with things that aren't always compatible with one another.
“Why bother when nearly everyone on the planet has a smartphone that can pay bills, transfer cash and buy pretty much whatever you want at the click of an app. Much easier.”
8. Manchester’s Office Market Will Not Be The Same...
"The impact of the waves of coworking operators hitting the Mancunian shore will change the landscape as we know it forever with the impact going beyond the traditional serviced office offer to an environment geared up for major corporate outsourcing. Adaptation will be the key word as the market reacts to the greatest disruption for as long as many can remember."
9. ... Because Work-Life Balance Is Not Going Away
“We are really just at the beginning of this transformation and as traditional landlords reinvent their offering and many new property companies enter the market it will be the genuine tech-enabled offices of the 21st century, ones which support and enable truly joined-up work and lifestyle factors that will drive this sector forward," Slater Heelis Head of Commercial Property Will Henson said.
10. Kendals Will Not Become a Hotel
"Kendals won’t become a hotel or apartments," Barton Willmore Planning Director Greg Dickson said.
The Kendals department store at Deansgate, Manchester, is to stay open after a new rental deal was agreed in December between House of Fraser owner Mike Ashley's Sports Direct and the building's Jersey-registered landlord.
Maybe Dickson knows something about the deal that the rest of us do not.
11. Yields Will Not Budge
“Expect prime property in the office and industrial sectors to remain strong with a stabilisation in values, not a fall,” Avison Young principal Dan Crossley said. “We also may see a freeing up of less-than-prime stock that investors have previously insisted on retaining. If sensibly priced, this will be welcomed by property companies and asset managers who have had very slim pickings over the last 18 months and they finally get the “value-add” opportunities they have been seeking.
“Investors are definitely not going to lose faith in the investment market in the North West. Despite any macro-economic uncertainty, Manchester and the North West is still very much recognised as a place to invest — more desirable than London.”
12. Nothing Is Certain (Except Manchester)
As the Brexit saga becomes evermore like a severely drugged-up remake of "Twin Peaks", as the Prime Minister heads for George Osborne’s freezer, and as we all head into a future of unprecedented digital connectivity, there is precious little to grab onto.
“The only thing that we can be certain of next year in that nothing is certain,” Paragon Building Consultancy Director James Onions said.
“Brexit won’t happen and whilst the powers at Westminster argue amongst themselves, we sturdy Northerners will carry on regardless; proposed master plans will become reality and investors will continue to favour our city. Manchester is famous for embracing change and its backing of the tech industry puts us light years ahead of any other U.K. city.The ‘can do’ attitude of the Mancunians will remain strong and 2019 will prove, once again, that it is not quite so grim up North.”